Ontario Privacy Law Would Affect US Companies in Province

A March 31 deadline looms for the Canadian Marketing Association and its members to file opposition against privacy legislation that would shut down most uses of consumer information for marketing purposes in Ontario. What's more, the legislation would affect U.S. companies with data processing or fulfillment facilities in the province.

The legislation, drafted by the Ontario Ministry of Consumer and Business Services last month, would require express consent before any personal information could be used for marketing.

"There are a lot of American companies, of course, that market into Canada, and they have some presence in the country," said John Gustavson, president/CEO of the Canadian Marketing Association. "If they have a presence in Ontario, they're subject to the jurisdiction of Ontario and will have to comply with Ontario law for any information that they have about any individual in Ontario."

The direct response industry in Ontario employs 410,000 people and generates annual sales of $43 billion, according to the CMA. Ontario is Canada's largest province, with more than one-third of the country's population.

However, the legislation is not limited to the personal information of Ontario residents. Any information transferred into Ontario for data processing or for fulfillment also would fall under it even if the information were not about Ontario citizens, Gustavson said.

The legislation would apply not only to information disclosed for third-party purposes but also to marketing to existing customers. And since it has no grandfather clause, marketers would have to opt-in their entire house files before sending customers more marketing materials.

"It would be terrible for marketers," said Charles Prescott, vice president of international business development and government affairs at the Direct Marketing Association.

Gustavson doesn't think the legislation will pass in its current form.

"I think the economic consequences of this are so disastrous that the government will be persuaded to change the legislation," he said. "There is intense lobbying going on right now. Everybody is outraged by this."

The legislation began as a health-related information privacy proposal and grew to encompass all personal information, said Prescott, who is working closely with the CMA to lobby against the legislation.

Norman Sterling, the minister of consumer and business services, will discuss the legislation at a Toronto Board of Trade breakfast meeting March 14.

Even after March 31, Gustavson expects a long process. Also, the legislation may get dropped after Ontario elects a new premier March 23 to replace Mike Harris, a Progressive Conservative who is stepping down. The new premier might appoint a new minister of consumer and business services who does not support the legislation.

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